Bluestone Home Loans revamps policies for broader reach and simplicity

Changes improve serviceability, LVRs, loan amounts and more

Bluestone Home Loans revamps policies for broader reach and simplicity

Bluestone Home Loans has enhanced its lending serviceability and flexibility with more than 20 policy changes, including reduced buffers, increased LVR and loan amounts, and increased maximum exposure limits.

The non-bank lender’s changes, aimed at addressing market challenges for brokers and customers, will apply to new applications starting September 28, 2023.

“At Bluestone, we prioritise feedback from our valued broker partners to better serve their customers,” said Tony MacRae (pictured above), chief sales officer at Bluestone Home Loans.  “As such, it was of great importance for us to incorporate this feedback into the policy changes we’re announcing today.” 

“Recognising the challenges around serviceability, we’ve taken steps by lowering our servicing buffer to 2%. In addition to removing our notional rent requirement, these changes can make a substantial difference in helping customers with home ownership.”

Key policy changes for brokers

The significant changes are capped off by the 2% serviceability buffer across all products, down from the previous 2.5%.

This is crucial, particularly considering the large number of borrowers still tied to low fixed-rate home loans from the pandemic era, while banks must adhere to the 3% serviceability buffer mandated by APRA.

Additionally, Bluestone’s LVRs and loan amounts have seen notable revisions across “key areas of Australia”.

In major cities such as Sydney and Melbourne, the maximum loan amount has now increased to $3 million. Other capital cities and select regional areas, excluding Darwin, have witnessed an uptick in loan amounts to $2.5m with LVR increased to 90%.

Notably, this category now includes regions such as the Central Coast and Newcastle. Meanwhile, in non-metropolitan areas, borrowers can now access loans of up to $1.5m.

Bluestone has also expanded its maximum exposure limit from $3m to $5m, broadening its lending capacity. Furthermore, the LVR for near prime loans has been elevated to 90% from the previous 85%.

“As we don’t charge lender’s mortgage insurance, customers are able to get into their own home sooner as well as save thousands in costs,” MacRae said.

Go-to lender for non-standard customers

As the refinancing boom continues, many lenders have looked to carve out their space in an increasingly competitive mortgage market.

MacRae said Bluestone was committed to being the “go-to lender” for non-standard customers.

“We’ve simplified requirements and reduced paperwork to offer greater flexibility,” he said.

For instance, Bluestone has lowered SMSF loan liquidity requirement to just 5% from 10% to “make it easier for customers looking to grow their wealth for retirement”.

With SMSF lending growing in popularity, the decision to increase the versatility of these loans has become increasingly crucial as major banks leave the space.

Additionally, borrowers on convenience are now eligible for investment loans, extending accessibility beyond owner-occupied loans.

Importantly, there are no cash-out limits on loans, with prime and near prime loans offering up to 90% LVR, while specialist and specialist+ loans provide up to 80% LVR.

Here are some of other policy changes designed to help more customers:

  • 6 months minimum ABN for specialist and specialist+ alt doc loans
  • No debt consolidation limit on prime loans
  • Unlimited line of credit up to 50% of total loan amount
  • Refinancing of private lenders with monthly repayments on prime loans or where interest has been capitalised on near prime loans
  • Units built within three years capped at 80% LVR (reduced from five years)

Bluestone has also made a variety of changes designed simplify borrower requirements and paperwork, including:

  • No notional rent requirement with proof of ongoing rent-free living
  • Exit strategy age increased to 50
  • Up to four guarantors on company and trust loans
  • Non-permanent visa holders borrowers allowed with a citizen or permanent resident borrower
  • Part-time income annualised from payslips
  • 10-year minimum loan term
  • AVMs and desktops on units
  • Desktops up to $2m property value in metro locations
  • Loan increase allowed three months after settlement and no limit on number of increases

More policy changes to come

While these policy changes overhaul Bluestone’s options, the non-bank it was “not done with improving” their policy to help brokers service more customers and grow their business.

“We have more changes in the pipeline set to go live towards the end of October, and we remain dedicated to listening to broker feedback and implementing further business improvements,” MacRae said.

Bluestone wanted their broker partners to feel supported, without the need to memorise these policy changes in detail, he said.

“When working with a non-standard customer, your first point of contact should always be Bluestone's Scenario Hotline on 13 BLUE. Our experienced underwriters are readily available to address any queries regarding our policy changes and how we can meet your customers' requirements.”

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